Corporate Taxation and the Choice of Patent Location within Multinational Firms
AbstractThis paper investigates whether corporate taxation affects the location of patents within a multinational group. We exploit a unique dataset which links patent data from the European Patent Office to micro panel data on European firms for 1995-2003. Our results suggest that the host country’s corporate tax rate exerts a negative effect on the number of patents filed by a multinational subsidiary. The effect is statistically significant and quantitatively large and turns out to be robust against controlling for affiliate size. The findings prevail if we additionally account for royalty withholding taxes. Moreover, binding ‘Controlled Foreign Company’ rules tend to decrease the number of patent applications.
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Bibliographic InfoPaper provided by Oxford University Centre for Business Taxation in its series Working Papers with number 0914.
Date of creation: 2009
Date of revision:
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corporate taxation; multinational enterprise; profit shifting;
Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ACC-2009-09-05 (Accounting & Auditing)
- NEP-ALL-2009-09-05 (All new papers)
- NEP-IPR-2009-09-05 (Intellectual Property Rights)
- NEP-PUB-2009-09-05 (Public Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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